Co-Sourced Trading (aka Hybrid, Partnered or Supplemental Trading)
Co-Sourced Trading, also sometimes referred to as hybrid, partnered or supplemental trading, sits between full in-house execution and fully outsourced trading. Under this model, an asset manager or asset owner retains its own internal trading function but selectively engages an external partner to support specific areas of execution.
This support is typically focused around asset classes, markets or time zones where the in-house team lacks sufficient scale, coverage or specialist expertise to deliver execution outcomes to the same standard as its core activity. Common examples include overnight market coverage, episodic trading in less liquid asset classes, or access to specialist execution skills that are not required on a full-time basis.
The appeal of co-sourced trading lies in its flexibility. Firms retain control over their trading strategy, broker relationships and governance framework, while augmenting their internal capabilities in a targeted and cost-effective way. It also allows organisations to scale execution capacity up or down without committing to permanent headcount, an increasingly important consideration in volatile markets and under tighter cost scrutiny.
Ergo Consultancy specialises in designing, implementing and reviewing co-sourced and hybrid trading models for buy-side firms. Our work typically begins with a detailed assessment of the existing trading function, including workload analysis, asset class coverage, time zone demands and governance requirements. From there, we help clients define where external support genuinely adds value and where execution is best retained in-house.
We advise on partner selection, operating model design, contractual structures and oversight frameworks, ensuring that co-sourced arrangements enhance execution quality without diluting accountability or control. For firms that are philosophically opposed to full outsourcing, or for whom it is not yet appropriate, co-sourced trading offers a pragmatic and increasingly mainstream alternative that can evolve alongside the business.
This support is typically focused around asset classes, markets or time zones where the in-house team lacks sufficient scale, coverage or specialist expertise to deliver execution outcomes to the same standard as its core activity. Common examples include overnight market coverage, episodic trading in less liquid asset classes, or access to specialist execution skills that are not required on a full-time basis.
The appeal of co-sourced trading lies in its flexibility. Firms retain control over their trading strategy, broker relationships and governance framework, while augmenting their internal capabilities in a targeted and cost-effective way. It also allows organisations to scale execution capacity up or down without committing to permanent headcount, an increasingly important consideration in volatile markets and under tighter cost scrutiny.
Ergo Consultancy specialises in designing, implementing and reviewing co-sourced and hybrid trading models for buy-side firms. Our work typically begins with a detailed assessment of the existing trading function, including workload analysis, asset class coverage, time zone demands and governance requirements. From there, we help clients define where external support genuinely adds value and where execution is best retained in-house.
We advise on partner selection, operating model design, contractual structures and oversight frameworks, ensuring that co-sourced arrangements enhance execution quality without diluting accountability or control. For firms that are philosophically opposed to full outsourcing, or for whom it is not yet appropriate, co-sourced trading offers a pragmatic and increasingly mainstream alternative that can evolve alongside the business.